Majesco sued for $10 mln by US customer for breach of agreement

Majesco, the India-based provider of IT solutions to the insurance industry, said its subsidiary has been sued by a customer in the US for $10 mln (Rs 64 cr).

In a filing on Sunday, Jan 28, the company said that on Jan 24, its subsidiary Majesco Software and Solutions Inc received a summons with notice filed in the Supreme Court of the State of New York.

In it, customer Alamance Services Inc sought compensatory damages of at least $10 million for alleged breach of its services and license agreement, Majesco said.

The amount includes lost profits and has to be proven at trial. It also includes pre-and post-judgment interest and costs and fees, the Indian company said.

“The company believes this claim has no merit and that it intends to defend against it vigorously and assert all of its rights against this customer,” it said.

It said it did not expect the outcome of this litigation to have a material effect on its business or results of operations.

“As an abundant caution, the company has made adequate provisions for bad receivables arising from such matter,” it said.

It also said that it has notified its insurer of the law suit. The insurer protects Majesco under a $40 million professional indemnity insurance policy.

“However, litigation is inherently unpredictable, and the costs and other effects of such matter and the possibility of any adverse outcome cannot be determined at this time,” it added.